Board of Governors of the Federal Reserve System (U.S.), 1935- and Greenspan, Alan, 1926- "Remarks before the Annual Convention of the American Bankers Association, Washington, D.C.." October 16, 1989, https://fraser.stlouisfed.org/title/452/item/8417, accessed on March 30, 2025.

Title: Remarks before the Annual Convention of the American Bankers Association, Washington, D.C.

Date: October 16, 1989
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image-container-0 For release on delivery 10 40 a.m EDT October 16, 1989 Remarks by Alan Greenspan, Chairman of the Board of Governors of the Federal Reserve System before the Annual Convention of the American Bankers Association Washington, D C October 16, 1989
image-container-1 I am very pleased to be here once again to address members of the American Bankers Association. Today, I want to use the opportunity to discuss an issue that is central to banks and that consumes considerable discussion at the Federal Reserve. The topic is a timeless one because it is so fundamental—the need for adequate bank capital. I devoted some attention to risk-based capital during my remarks to your convention last year in Honolulu. Today I do not wish to debate the details of which specific ratios or standards are most appropriate to assess capital adequacy. Rather, I want to address the broader policy issues raised by some institutions that the capital requirements we have imposed will undermine the ability of U.S. banking organizations to compete. I recognize that many institutions here today have made laudable progress to improve their capital ratios and that most of the nation's 13,000 commercial banks already exceed existing minimum capital standards. However, it is important to keep in mind that, in both relative and absolute terms, banking is a highly leveraged industry. Moreover, despite the progress many of you have made in recent years to improve your capital ratios, capital levels for the industry remain at the low end of their broad historical range.
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Date: October 16, 1989
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